Ethereum on Shaky Ground as Top Trader Turns Bearish
- Ethereum has had a tough week so far, losing nearly 300 points in market value.
- Although ETH is back above $3,000, it’s sitting on shaky ground.
- Renowned analyst Peter Brandt believes ETH could dive towards $2,000.
Ethereum has breached a critical support barrier, leaving its price prone to a steep decline.
Ethereum Primed for Further Loses
Ethereum could be due for another dip.
ETH took a 16% nosedive following Monday’s open alongside other digital assets and traditional markets. The second-largest cryptocurrency by market cap’s price dropped from a daily high of $3,346 to a low of $2,805.
Given the magnitude of the downswing, trading veteran Peter Brandt highlighted the possibility that a head-and-shoulders pattern was created on Ethereum’s daily chart. The bearish technical formation has been developing since early May as a direct result of ETH’s price action.
Now that Ethereum has dipped below the head-and-shoulders’ neckline at $3,000, the odds favor a steeper correction.
Further selling pressure around the current price levels could push ETH’s price down by another 25% to $2,250.
This target is determined by measuring the height between the pattern’s head and neckline and adding that distance upwards from the breakout point.
Whales Sell on Weak Support
Behavior analytics platform Santiment reveals that whales have been cashing out while Ethereum sits on top of weak support.
The number of addresses holding 100,000 to 1,000,000 ETH has decreased by more than 3.3% since Sep. 17. Roughly five whales have left the network or redistributed their token since then, which adds credence to the pessimistic outlook that Brandt detailed.
On-chain data shows that a large number of addresses acquired a significant amount of Ethereum at $3,500. If ETH manages to reclaim this resistance level as support, it could have the strength to invalidate the pessimistic scenario and advance further.
Under such unique circumstances, ETH would likely rise to retest its mid-May all-time high of $4,385.
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